Again the broad markets cannot string together a trend, but the nine weeks of sideways movement has been fun! Since testing the support near 1820 on April 11th the back and forth trading in a tight range has been too choppy to capitalize on much of anything other than day trading, and that better be a good call on which side to be on for the day. If it was like Tuesday it was some of both. The chop is getting worse and the ability to gain any momentum is muted by the lack of clarity, volume and willing investors. For now we continue to let the dust settle and look for opportunities as it unfolds.
Running the EGG Scans – First the daily winners… Russell Small Caps Short (TZA) opposite of the scans run for Monday, and only validates the point above… no direction. FAZ is the short financials ETF and shows the selling momentum on Tuesday… opposite of Monday. ERUS – trade on Russia has been the one constant of late with a solid move higher the last two weeks, if you could stomach the uncertainty of what Russia might do relative to war with the Ukraine. SVXY the short volatility play has been consistent as well showing no fear from investors.
Looking at the trends in place reveals the volatility within the opportunities that would take us out of most trades. TZA versus TNA is a good example. TZA is one of the leading sectors over the trailing five days, but it has move 10-12% either side of the trade. DUST (short gold miners) has been another leaders, but same issue relative to the swings on either side of the trade.
ERUS , UCO, DRN and BKF have offered some movement on the upside the last two weeks, but it has been a challenging, choppy environment for trading.
UNG is bouncing off the current test of support near the $23.85 mark. A move back above the 50 DMA could get interesting and one to add to our watch list short term.
There is plenty to watch and for now we will let this rest as the direction remains challenged by uncertainty, and investors are more nervous than a long tail cat in a room full of rocking chairs.
EGG Model Watch List:
Added QLD to the EGG Watch and it was at the entry point today when the comments from Mr. Fischer were made relative to raising interest rates. That sent all the index lower, but the NASDAQ 1oo index fell 1% over the next two hours. We did bounce into the close, but we will watch to see how it sets up in the morning.
Patience for now.